If Whidbey Island Naval Air Station was a huge shopping mall or an oil refinery, Oak Harbor School District wouldn’t have to worry about federal funding from the Impact Aid. But it’s not, so they do.

As Superintendent Rick Schulte explained, the Navy is the biggest business in Oak Harbor, but because it is a military installation, it doesn’t pay property taxes, which help support area schools.

“Half of the county’s tax roll is not being taxed,” Schulte said.

Since the Truman era the federal government has compensated school districts for this lost revenue with Impact Aid, a portion of the federal budget set aside for school districts with military bases or Indian reservations.

President Bush’s budget released last week proposes ending Impact Aid funding for students whose parents are active military but live off base, cutting $127 million from the program’s budget.

For Oak Harbor School District this would mean a general fund budget cut of about $1.2 million.

There are 1,023 students in the district who live on base and have one or more parent on active duty. The district receives about $3,500 for each of these students. For the 1,728 children of military personnel who live off base the district receives approximately $600 to $700 each, but don’t try to do the math.

The actual amount received is arrived at through a series of calculations and negotiations.

The only constant is that the schools never get all the money.

“In the last 25 years we haven’t gotten the full amount,” Schulte said.

Oak Harbor schools have a high percentage of military-related students, particularly in the lower grades, from 47 percent at Clover Valley Elementary to 80 percent at Crescent Harbor Elementary.

“It’s our bread and butter,” Schulte said of Impact Aid.

Schulte is president of the Washington chapter of the National Association of Federally Impacted Schools, and goes to Washington, D.C. twice a year. His next trip is in March. He said Bush’s proposed cuts are nothing new, it happens every year, but this is the first time a president has proposed to cut funding for one entire category of aid recipients.

“I don’t want to cry wolf, but this is troubling,” Schulte said.

Coupeville School District also receives Impact Aid funding, with about 175 students whose parents are either military or civilian workers on the base, according to finance director Nancy Conard.

Under Bush’s proposal, Coupeville would lose the majority of its Impact Aid money, about $10,000.

Rep. Rick Larsen is a member of the House Impact Aid Coalition, and has co-written a letter to the chairman of the budget committee, Jim Nussle.

The letter reads in part: “With soldiers being deployed overseas every day, it is important for them to know the needs of their families back home are being met. At a time of state budgetary cuts and an impending war, the funding cuts in the president’s budget would present a severe hardship for both administrators and students in affected districts.”

“It’s critical to ensure the quality of education for (the children of) the men and women in the Armed Forces,” Larsen said in a phone interview Tuesday.

“It’s important for the administration to wade in and restore the cuts as we move ahead,” he said. “We need to support our troops by supporting their families. Cuts in Impact Aid are the wrong way to do that.”

Larsen will introduce legislation, called “GRADE A,” in the House next week that would move Impact Aid to an entitlement category, where it would be less susceptible to the whims of budget-chopping presidents, and schools would get the full amount.

You can reach News-Times reporter Marcie Miller at mmiller@whidbeynewstimes.com or call 675-6611